Group Practice Economics

Would your new associate make a good partner?
Try this test

Too many groups offer partnerships in haste, without much thought. Here's a way to rate a candidate objectively.

By Michael J. Wiley

The complaint from my clients was familiar: A doctor was nearing the end of his employment contract, and the group's partners were agonizing over whether to offer him partnership.

Their hesitancy didn't concern the associate's clinical competence or productivity, but some amorphous negative that the established doctors couldn't or wouldn't articulate. Instead, they made remarks like, "I don't know, he just doesn't seem right for us." It was only after my extensive probing that the physicians were able to give voice to why they were uncomfortable making the associate a partner.

After watching too many groups struggle with this, I developed a test that allows group members to rate potential partners in specific categories. The categories themselves are weighted on a scale of 1 to 10 (depending on their importance to the partners), and the associate is scored in each category, also on a scale of 1 to 10. Then an overall rating is computed (see the example below).

Say a new doctor will be eligible for partnership in two years. At the end of the first year, each partner uses the partnership test to rate the candidate. An overall rating of less than 80 percent from any partner indicates that significant issues need to be addressed. The associate should be notified of the test results, given specific examples of problem behavior, and offered an opportunity to change course well before a partnership vote.

One of my clients, a seven-doctor internal medicine group, hired an excellent clinician who, his colleagues soon discovered, has a low boiling point. On several occasions, he's lost his temper and berated nursing home and hospital administrators. The other doctors began to fear, rightly so, that this associate's blowups would reflect badly on the group. So they gave him a low score in "relationships with hospital and nursing home staff"—and told him that unless he can curb his temper, he won't be made a partner next year. Six months have passed without an incident.

In another group, two of three cardiologists were ready to vote an associate in as a partner after two years, but the third kept hemming and hawing. It was only after the three doctors put together a partnership test, which required them to identify the qualities they value in a partner, that the third cardiologist was able to clarify his misgivings: The young physician seemed more interested in maintaining an easy lifestyle than in putting in extra time to help manage the practice.

The doctor-partners sat the associate down and offered him an attractive one-year employment extension—but with a string attached. During the next 12 months he would be expected to attend the partners' monthly management meetings. Although the young doctor wouldn't have a vote, he would be asked to provide management input so the partners could judge his business sense and his commitment to building the practice.

Although most groups swear they carefully select new doctors to join their practice, the opposite is often true. Groups generally wait until they have too many patients to handle, then begin casting about for someone in a particular specialty. Depending on where the group is located, the recruitment effort may yield only a handful of candidates. The job might go to the least objectionable applicant—hardly a reasonable way to select a future partner.

You'll learn a lot more about an associate during his or her first year with your practice. With partnership another year away, this test allows you to judge the candidate on qualities other than clinical competence and productivity.

By indicating to associates where they're falling short, the group can avoid a costly mistake. Either the young doctor will come around, and you'll have gained a partner and avoided another search for an associate. Or you'll find the young doctor doesn't have what it takes to be an owner of your practice, and you'll have saved yourself the painful experience of trying to sever a partnership agreement.

The author is an editorial consultant to Medical Economics and a certified health care business consultant with Healthcare Management and Consulting Services in Bay Shore, NY.

Rating a potential partner

Begin by weighting each of the 10 partnership criteria on a scale of 1 (least important) to 10 (most important), and put the weighted number in column 2. Total these numbers and multiply by 10 to determine the "maximum result."

Next, score the associate from 1 to 10 in each category, with 10 being exceptional, and put those numbers in column 3. Multiply each individual score by the weighted factor in column 2, then put the result in column 4. Total the numbers in column 4, and divide that figure by the maximum result to obtain the score as a percentage. If the candidate receives a score of less than 80 percent, areas of weakness should be dealt with before partnership is offered.

In the example below, the rating is 74 percent—655 divided by 880.

 

Michael Wiley. Would your new associate make a good partner? Try this test. Medical Economics 2001;4:70.